FORMER BARTON HILL QUARRY, BIRCHOVER

PHASE 2

VIABILITY STUDY

June 2017 Contents

01. Introduction.
02. Background.
03. The existing approval.
04. The proposed scheme.
05. Reasons for the proposed amendments to the design.
06. Existing local occupancy provision.
07. Elements common to both schemes.
08. Proposed values to be applied to each scheme.
09. Gross Development Value.
10. Net Development Value.
11. Conclusions.

Appendix A – Approved Masterplan (Oasis)

Appendix B – Proposed Masterplan (Urban Designs)

Appendix C – District Valuer’s Report

1. **INTRODUCTION**

This study is submitted in support of an application to the Peak District National Park Authority that seeks to revise the existing approval for the development of the second phase of the former Barton Hill Quarry in the village of Birchover.

2. **BACKGROUND**

On 1 October 2013 approval was granted for the development of the former Barton Hill Quarry with 18 houses in accordance with proposals drawn up by Oasis Urban Design & Architecture (Oasis).

Of those 18 houses it was originally agreed that 5, fronting Main Street, would be provided subject to local occupancy restrictions imposed under a Section 106 Agreement.

Following further discussions it was agreed that the largest of the 5 proposed local occupancy houses should be sub-divided to form two smaller properties. This variation had the effect of creating an additional dwelling and hence the original Oasis scheme now amounted to 19 units in total of which it was agreed 6 would be dedicated for local occupancy – see Section 6 following.

Those 6 local occupancy houses and the two detached houses situated on the former car park on the south side of Main Street, opposite the main development site, have now been completed.

The developers wish to complete the remainder of the scheme but are seeking, through the current application, to vary the existing approval to revise the number and type of houses within Phase 2. The significant element of the new proposal is that it seeks permission to construct one further dwelling than is presently authorised.

The Peak District National Park Authority have therefore asked the developer to address in this report whether or not the grant of consent to construct an additional dwelling would be grounds to seek a further Section 106 contribution. 3. **THE EXISTING APPROVAL**

Attached at Appendix A is the masterplan produced by Oasis relating to the existing approved scheme although it should be borne in mind that, as mentioned above, the single dwelling shown as Plot 4 has since been divided into two houses.

Since this Oasis masterplan was approved the developers have varied, and had approved, the detailed design of the property proposed for Plot 15 as shown on the Oasis masterplan from a 4 bedroom detached house to a 5 bedroom detached by utilising the loft space for the creation of an additional bedroom.

It is intended to commence construction of this house in the near future.

Excluding Plot 15 the approved plan of the as yet undeveloped section of the site shows the following properties yet to be built out:

- 3 x 5 bedroom detached
- 5 x 4 bedroom detached
- 1 x 4 bedroom semi-detached
- 1 x 3 bedroom semi-detached

Permission to construct total of a further 11 houses, including Plot 15, is therefore in existence.

4. **THE PROPOSED SCHEME**

Attached at Appendix B is the masterplan relating to the revised proposal produced by Urban Designs Ltd. This incorporates the houses already built under the original permission and shows the revised form of Plot 15 as subsequently approved.

Including the revised design for Plot 15 the latest proposal shows a further 12 dwellings in total yet to be constructed. However, the house types proposed are somewhat more varied than the Oasis scheme, in an attempt to appeal to a wider range of prospective purchasers.

Excluding the redesigned Plot 15 the revised Urban Designs proposal shows:

- 3 x 5 bedroom detached
- 4 x 4 bedroom detached
- 4 x 4 bedroom semi-detached In summary the revised proposal incorporates twice the number of semi-detached houses at the expense of one of the Oasis 4 bed detached units but, in doing so, adds one further property to the total proposed in Phase 2 bringing it up to 12.

5. REASONS FOR THE PROPOSED AMENDMENTS TO THE DESIGN

The developers have received sales advice from their marketing agents that the Oasis scheme does not provide sufficient variety of house types to appeal to a broad range of buyers. Until the design for Plot 15 was varied the approved scheme contained 6 x 4 bedroom detached houses and only two semi-detached properties. The revised scheme provides a more even split of numbers across the different house types which should be more appealing to a wider range of buyers and budgets and which, from the developer’s perspective, should also reduce the prospect of lengthy vacancies whilst buyers were sought for numerous very similar properties.

6. EXISTING LOCAL OCCUPANCY PROVISION

It is important to mention at this point that although the original planning permission granted relating to the Oasis scheme required only 5 local occupancy properties to be provided the developers subsequently agreed with the Authority that the size of one of these houses could have been considered to represent “over-investment” and so they would voluntarily provide 6 such properties by splitting the largest unit into two smaller 2 bed properties which it was agreed would better serve the needs of the local population.

Rather than simply retain the 6th house to sell unfettered the developers voluntarily agreed to allow all 6 to be bound by the Local Occupancy provisions of the S106 Agreement.

The valuations subsequently provided by the District Valuer discounted the sale values attributable to the Local Occupancy houses by 25% in comparison with open market sale values. This has resulted in the developer forgoing £50,000 in net profit on the sale of the 6th house (unrestricted sale value of £200,000 v £150,000 once S106 criteria applied – see Richard Hemsworth’s valuations contained within his email of 13 May 2016 in Appendix C).

Furthermore, the developer believes that as the originally approved scheme called for 5 local occupancy houses to be provided out of a total of 18 properties, representing approx. 28% of the total, and as the 6 such houses already completed represent a slight increase over that proportion to 30% of the proposed scheme, then had the original application been for 20 houses (as is sought by the revised application) and had it provided 6 local occupancy houses under a S106 Agreement then there is every reason to believe the Authority would have deemed those 6 an entirely acceptable level of provision. 7. **ELEMENTS COMMON TO BOTH SCHEMES**

Before looking in detail at the differences in viability terms between the approved and proposed schemes it is worth identifying the common elements to both so these can be eliminated.

These are:

i) The two 5 bed detached houses completed on the south side of Main Street;

ii) The 6 local occupancy houses provided in accordance with the Section 106 Agreement - of which two remain unsold as at the date of this report, albeit one is in solicitors’ hands;

iii) The revised approval for the construction of the house proposed for Plot 15.

8. **PROPOSED VALUES TO BE APPLIED TO EACH SCHEME**

The following estimated sale values have been provided in consultation with Saxton Mee (Matlock office) who have been responsible for all marketing and sales to date on the development.

The developers have received, and accepted, an offer of £573,000 for one on the two 5 bedroom detached properties constructed on the south side of Main Street. This offer has therefore been used as good current market evidence of values in that market segment and formed the starting point for allocating estimated sales values to the remainder of the house types proposed, as follows:

i) 5 bed detached @ £575,000

ii) 4 bed detached @ £500,000

iii) 4 bed semi-detached @ £350,000

iv) 3 bed semi-detached @ £325,000 9. **GROSS DEVELOPMENT VALUE**

Applying these estimated sales values to the house types in the approved Oasis scheme and the proposed Urban Designs scheme produces the following sales matrix:

| HOUSE TYPE | APPROVED | PROPOSED | |-----------------------|-------------------|-------------------| | 5 bed detached | 3 x £575,000 = £1,725,000 | 3 x £575,000 = £1,725,000 | | 4 bed detached | 5 x £500,000 = £2,500,000 | 4 x £500,000 = £2,000,000 | | 4 bed semi-detached | 1 x £350,000 = £350,000 | 4 x £350,000 = £1,400,000 | | 3 bed semi-detached | 1 x £325,000 = £325,000 | - | | **Total** | 10 houses at £4,900,000 | 11 houses at £5,125,000 |

The difference in Gross Development Value is therefore £225,000.

10. **NET DEVELOPMENT VALUE**

The project Quantity Surveyor estimates an average construction cost of £1,280/m² is applicable to these properties. This figure includes necessary fees and an apportioned element relating to the construction of the road and other services and drainage infrastructure required to service the properties.

The 10 houses remaining to be constructed within the Oasis scheme total approx. 1,450m².

The 11 houses for which a revised approval is sought total approx. 1,590m².

The variance between the two is therefore 140m² at a rate of £1,280/m² = an additional £179,200 – say £180,000 - required to complete the revised scheme for which permission is now sought.

The net difference in value between the two schemes is therefore an additional £225,000 in sales revenue less £180,000 in costs giving an increase in Net Development Value of £45,000 attributable to the revised scheme. 11. CONCLUSIONS

The developer contends that whilst, on the face of it, the revised scheme for which they now seek permission, which increases the total number of houses proposed from 19 to 20, produces a net increase in development profit of approximately £45,000, through the voluntary dedication of an additional local needs property at the outset of the scheme the developer has already forgone potential profits of £50,000 and hence the revisions sought under the latest application merely seek to redress the balance and put the scheme back on the originally accepted financial footing envisaged at the outset.

Furthermore, in addition to already providing a greater proportion of Local occupancy properties than required under the original permission, the revised scheme also provides a greater range of property types and sizes, and so price points, which will undoubtedly broaden the attractiveness of its offer to the local market. Overall it is therefore, in the developer’s view, a better scheme.

The developers submit that this background to the revised application provides more than enough justification for the Authority to approve the latest proposals without the need to impose a requirement for any further contributions from the developer under an additional Section 106 Agreement relating to the revised application.

Produced by: S. A. White BSc(Hons)MRICS for HPLP

Date: 16/6/17 APPENDIX A – APPROVED MASTERPLAN APPENDIX B – PROPOSED MASTERPLAN Dear Simon

In my opinion there has been little movement in the market since April 2015. However, I understand there has been an expression of interest from 40 local people who all qualify for these six properties. Furthermore, on my last inspection three properties were unfinished. I am also impressed with the whole specification of this development and all the properties have been well decorated with carpets throughout. Consequently, I am inclined to increase my valuations by £5,000 per property due to this level of interest and quality of finish. I am also inclined to increase plot 4b due to a larger garden than plot 4a. This was not evident on my last inspection.

I have kept the rental valuations as 2015.

Accordingly, my revised valuations are as follows:-

4b Barton Hill Croft Unrestricted Market Value - £200,000. Value subject to Section 106 Agreement - £150,000. Market Rent - £600 per calendar month.

4a Barton Hill Croft Unrestricted Market Value - £195,000. Value subject to Section 106 Agreement - £146,250. Market Rent - £600 per calendar month.

4 Barton Hill Croft Unrestricted Market Value - £225,000. Value subject to Section 106 Agreement - £168,750. Market Rent - £675 per calendar month.

3 Barton Hill Croft Unrestricted Market Value - £235,000. Value subject to Section 106 Agreement - £176,250. Market Rent - £700 per calendar month.

2 Barton Hill Croft Unrestricted Market Value - £230,000. Value subject to Section 106 Agreement - £172,500.

Market Rent - £700 per calendar month.

1 Barton Hill Croft

Unrestricted Market Value - £235,000.

Value subject to Section 106 Agreement - £176,250.

Market Rent - £700 per calendar month.

If you are in agreement, I will report to PDNP next week.

Kind Regards

Richard

Richard Hemsworth MRICS | Senior Surveyor | DVS - Property Services arm of the VOA | Valuation Office Agency Sheffield Valuation Office, Greenfield House, 32 Scotland Street, Sheffield | S3 7DF | Tel: 03000 503186 | Mob: 07795 020653 | richard.a.hemsworth@voa.gsi.gov.uk For more information on the services we provide please visit our website<http://www.voa.gov.uk/dvs/index.htm> DVS Property Specialists for the Public Sector

From: Hemsworth, Richard A Sent: 13 May 2016 11:40 To: 'Simon White' Subject: RE: Birchover - Local Occupancy Houses - S106 Valuation

Morning Simon

Working on it this morning, I will let you have my figures this afternoon.

Kind Regards

Richard

Richard Hemsworth MRICS | Senior Surveyor | DVS - Property Services arm of the VOA | Valuation Office Agency Sheffield Valuation Office, Greenfield House, 32 Scotland Street, Sheffield | S3 7DF | Tel: 03000 503186 | Mob: 07795 020653 | richard.a.hemsworth@voa.gsi.gov.uk For more information on the services we provide please visit our website<http://www.voa.gov.uk/dvs/index.html> DVS Property Specialists for the Public Sector